Data | Centre's tax revenues grew despite stringent lockdown on the back of excise duties

Shift in tax burden comes at a time when pandemic has led to many job losses and reduced income levels

Tax revenues increase due to sharp rise in union excise duties

In FY21, despite a stringent lockdown and a raging COVID-19 first wave, the gross tax revenue collected by the Centre increased over FY20. However, the increase was made possible by a sharp rise in contributions from union excise duties . This compensated for the sharp drop in the share of corporate tax collection. The shift in tax burden from the corporates to the masses has come at a time when the pandemic has led to many job losses and reduced income levels thereby pushing more people into poverty.

Higher collections

Despite a national lockdown, the gross tax revenue grew in FY21 compared to FY20. About 20.24 lakh crore was collected in FY21.

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Tax burden

In FY21, the share of income tax (23.2%) in the gross tax revenue exceeded the contribution from corporate tax (22.6%). The Central Goods and Services Tax also contributed a similar share (22.5%). The contribution from union excise duties rose sharply from 12% to 19.2% compensating for the loss in share from corporate tax which fell sharply from 27.7% to 22.6%.

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Slipping into poverty

According to the Pew Research Center, the number of poor people in India (incomes <=$2 a day) is estimated to have increased from almost 6 crore to 13.4 crore due to the pandemic. The chart shows the estimated number of people (in crore) in each income tier in 2020 before and after — the COVID-19 induced lockdowns.

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Consuming less

In FY21, while fuel consumption decreased by more than 10%, the contribution of union excise duties to the overall tax revenue increased by 7% points.

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